PRIVATE EQUITY INVESTMENTS IN INDIAN INSURANCE COMPANIES NOW PERMITTED
INDIA’S TAX REGULATOR “CLARIFIES” INDIRECT TRANSFER PROVISIONS IN CASE OF REDEMPTION OF SHARES OUTSIDE INDIA
Under the provisions of the Income-tax Act, 1961 (the “ IT Act”), the income of a non-resident will be deemed to accrue or arise in India if it arises, directly or indirectly, through or from any business connection, property, asset or source of income, or from a transfer of a capital asset (shares or other interest) situated in India. The indirect transfer provision was introduced in the Finance Act, 2012, by way of Explanation 5 to Section 9(1)(i) of the IT Act, clarifying that an offshore capital asset will be treated as situated in India if it substantially derives its value (directly or indirectly) from assets located in India.
INDIA’S SECURITIES REGULATOR ON SHELL COMPANIES, EXEMPTIONS FROM OPEN OFFER
Recently, the Securities and Exchange Board of India (the “ SEBI”) has approved and notified several important changes to Indian securities regulations, including, extending relaxations from open offer and preferential issue requirements to new investors acquiring shares of distressed companies, extending relaxations from open offer requirements to acquisitions made pursuant to resolution plans approved by the National Company Law Tribunal (the “NCLT”) and exemptions from lock-in requirements at the time of initial public offer (“IPO”) to Category II Alternative Investment Funds (“ AIFs”) such as private equity funds and debt funds.